How to Buy Insurance

What's the deal with insurance. Everywhere you go you see the Gecko, the hands and lets not forget the good nei-"bear". And everyone of them are out there to serve you better, right? It is however, important for you to have a good idea of what you are buying in order to become a savvier consumer. Here are five area's that you need insurance.


1. Auto: Get high limits of liability - it's a great buy. Save on premium by increasing your deductible.

2. Homeowners: Be sure to get replacement cost coverage for you dwelling and your stuff. Be sure your home is insured for what it will cost to replace. If you have an older home - market value and new construction prices will usually not be the same.

3. Life: Buy 10 times your income in 10, 15, 20, 25 or 30 year level term insurance. Depending on how long you have until retirement. DO NOT BUY PERMANENT INSURANCE!!! You are throwing money away with that crap.

4. Disability: Buy disability from work it's about 75% cheaper than what you can buy on the open market.

5. Health: Also get through work or look into high deductible health insurance with an HSA. Only do the high deductible if you have your deductible in an emergency fund.

Insurance is primarily a commodity. The extra premium is for service. How much do you value service? I'd rather keep my money.

How to live on a budget. The seven steps to gain control over your finances.

1. Write out your monthly budget on paper. Spend every dollar on paper before the month begins. Don't use Quicken! - it makes you lazy. Quicken makes you think that the software is controlling your money. This is not true, You control your money!

2. Give the budget to your spouse and make sure he/she agrees on the amounts in each category.

3. Watch your money! Monitor your budget everyday for the first month, every other day the second month and then once a week after that. You should be able to maintain a budget with weekly inspection once you get the hang of it. You will probably have to change your budget 2 or 3 times.

4. Never spend more than $300 without first talking to your spouse and sleeping on the decision.

5. Keep a checkbook and balance it.

6. Use the envelope system (cash) - it will make you prudent.

7. Use your debit card sparingly.

P.S. - Remember to take a deep breath and relax. Your money (the families money) goes where ever you tell it to go and part of being an adult is to make responsible decisions with the money God has given us.

Discipline

I've decided that getting what I want is about controlling my behavior. Which I do have control over, until I get mentally highjacked by the little kid in me. I think there is a problem with the verbage of self-discipline. This pharase states that we must control ourselves from behaving like ourselves, why would we do that - it creates a feeling of loss of freedom. The idea that we are slaves to the culture and are simply doing what society says we should be doing. Although this makes sense it is infact a paradox of life.

Jesus said, ""I am come that they (us) might have life, and that they might have life more abundantly". I believe that Christ has given me life to live. I want to have the best life I can have while I'm here on earth so I must strive for optimization.

Table Salt

"Talent is cheaper than table salt. What separates the talented individual from the successful one is a lot of hard work."  -Stephen King What a fantastic quote!!  Dave Ramsey spoke about this quote yesterday on his radio show and talked about how important hard work is.  Why do we even have to say it.  I'll tell you why you have to say it, because it isn't taught in today's Western culture.  Dillegence is discipline with excellence over an extended period of time.  If you just work really hard you'll beat 80% of the people out there.  So here are three things to keep in mind if you want to win: 1.  Focus on the Now.  What am I doing now... and now... and now?  How am I adding value to my work?   2.  Do your best!  Not be the best, just do your best.  No one can trump you if you simply do your best.  If you continue to improve your best - you'll become the best. 3.  Practice fundamentals everyday and constantly improve on those fundamentals.  If you sell for a living, pick up the phone, call your customers and new clients everyday.   Oh yeah!  Here is a forth suggestion just for kicks. 4.  Find the Why.  The why is very important.  Find out what you want out of whatever your doing.  That will help.

The two hats

I think humans have two hats when it comes to money:

1. Manager - the part of you that takes an eagle eye view and oversees how and where the money goes.

2. Worker - the part of you that uses the money and enjoys its use and what it produces (buys).

Knowing which hat you have on is important and making sure the manager is making the decisions on the direction of the money. Many times in organizations there are several managers over various departments and if there is to be cooperation then each manager must learn to give and take. The same is true in marriage. As spouses we must be sure to communicate and having a common goal makes this easier. Plan and talk.

Money: The Proper Perspective

I've found that money, or more accurately what we spend money on is really just desire, want, lust, a craving of the flesh. I'm not saying that these things are bad, its part of what makes us human. However, to live a life that is entirely desire driven and only living for the moment is a life that feels meaningless and without purpose. I want to live a life that has purpose. If not then why are we here. Why exist if we are not here to love, plan and edify.

We surely are here to show that we are good and faithful servants who are in charge of the Master's possessions while we are here. WE DO NOT OWN ANYTHING! We are simply the managers of God's stuff while we are here. This higher truth gives direction to my life and helps me realize that there are many ways that I can help people, one of which is to tell them that they can have peace it there life when it comes to money. Stop worrying about money - plan and execute.

DEBT IS SLAVERY!

Proverbs 22:6-7

"Train [a] a child in the way he should go, and when he is old he will not turn from it. The rich rule over the poor, and the borrower is servant to the lender."

Financial Habits

What are financial habits? Anything you do habitually that affects your finances. Entertainment, coffee shop, eating out, etc. Financial responsibility has been lost in American culture primarily due to the lack of teaching about money and its responsible use. This lack of financial discipline is what will keep most of our citizens in poverty and create an over dependence upon our government.

The country needs a financial planning course for students which is not sponsored by any large corporations. Also parents need to take a leadership role in teaching their children through their own good example. I propose that we write our city councilmen and women and encourage them to make a mandatory financial planning course available in our high schools.

A financial course covering these topics would be a great start:

1. Budgeting
2. Debt
3. Giving
4. Insurance
5. Investments